CHRISTMAS ISLAND - Children are bodyboarding in shallow, crystal waters as their parents sit quietly in the shade of a coconut palm.

It's an idyllic scene - apart from the Australian Navy ship hovering offshore and the stony-faced security staff waiting on the jetty for the latest batch of asylum boat arrivals.

Despite their best efforts, Christmas Islanders are finding it increasingly difficult to ignore the headline-making events unfolding in their midst.

The main detention centre is overflowing, services are stretched to breaking point, and the island has become a political football - a situation likely to worsen as a federal election, due this year, approaches.

Late last week, the Australian Government said the processing of new claims by Sri Lankan and Afghan asylum-seekers would be suspended for three to six months, because of improved security in the two countries.

The Opposition spokesman on immigration, Scott Morrison, denounced the move as "a response for the election ... not a response to stop the boats".

Seventy more people were brought ashore at Christmas Island on Friday after the interception of the 38th boat to arrive in Australian waters this year. Since then two more boats have been intercepted.

Islanders have grown accustomed to the almost daily ritual at Flying Fish Cove, where would-be refugees are collected by barge, transferred to school buses on the jetty and taken to one of two detention centres.

Once famous for its profusion of wildlife and plants, the island is now known primarily as a place of incarceration.

"Everyone thinks of detention when they think of Christmas Island," says Simon Prince, who runs a local dive operation.

Prince, from Sydney, moved to the island 14 years ago - drawn, like many, by its beauty and seclusion.

The Australian external territory, 2600km northwest of Perth, is populated mainly by Malays and Chinese, descendants of indentured workers brought in the 19th century to work in the phosphate mines.

Environment Minister Peter Garrett is expected to rule soon on an application for new mining leases.

The expansion, which would mean destroying pristine rainforest, is opposed by the fledgling eco-tourism industry.

Overshadowing the battle between industry and the environment is "that place", as locals call the main detention centre, on a jungle-clad plateau.

There are more than 2000 asylum-seekers and 800 Department of Immigration staff on Christmas, and only 1200 residents.

Gordon Haye, the island's one taxi driver, says rents have almost doubled.

Medical staff at the small hospital are struggling to cope, and the sewerage system is overloaded. Pink circles painted on the road leading to the detention centre denote sites where coconut crabs have been run over.

National Parks officials say 190 of the protected crabs - the world's largest land invertebrate - have already been killed this year.

"It's outsiders speeding," says one resident.

Although the centre has become key to the island's economy, many wish processing would move to the mainland.

Says one resident: "It's affecting the social fabric of the community, and we don't have a voice."

Prince says: "I would like the place to be known for what it's best for - as a pristine wilderness, both above and below the water, and as one of the last frontiers of nature."